That’s the bottom line on this "bailout."
You, the American taxpayer, are being given the opportunity to do what J.P. Morgan did during the Panic of 1907. No one is buying valuable assets. Step up to the plate, buy enough to liquify the market, and you can make a killing.
You are offering cash for assets that are worth far more than the cash, because you have the time to wait for a return. That was the Morgan way. You, the American taxpayer, now have the opportunity to do what Morgan did, and feel what Morgan felt. I find that opportunity delicious.
The bankers are scared. Screw them to the wall. Offer just enough for the assets to set a floor price and then, as the prices rise, sell back at your leisure. Make it Wall Street’s contribution to the Iraq War, a stupidity tax to take back some of what Bush gave them.
Unfortunately (because I don’t like him) Jim Cramer (left) is right on this
one. The leftists who fear that this is a way to keep bankers rich can
get the protection they need in the deal now being negotiated.
The rightists who hate this deal in their bones are, frankly,
unnecessary. There are certainly 10 Republican Senators who would
refuse to filibuster, and the House Republicans are irrelevant.
That’s the real reason John McCain has rushed back to Washington, to try and get some leverage. My advice. Don’t give him any.
While
claiming he’s all for the current package, McCain plans to bring his own
caucus together and threaten a filibuster unless he gets
concessions back. The Democrats would then have to either grant some
concessions, making McCain a hero, or call the Republican Party’s
bluff.
My view? Call the bluff. Don’t throw him a single bone.
The first thing to do would be to schedule a cloture vote. Obama and Biden would be available to vote "aye" on
moving to a final vote. If it looks like the Republicans can hold 40 votes against even considering the package,
then demand they stage a real filibuster. Stay up all night, stay up
all weekend, and play "Mr. Smith" on them, only with their allies on Wall Street playing the part played by Edward Arnold in the movie, piling on the pressure for them to capitulate.
They will.
In that debate emphasize what Cramer did today. This is an opportunity
to make a profit for the Treasury. This is an Invest in America plan,
not a bailout the bankers plan. This is a necessity if we’re to have
liquid markets that make mortgages and college loans and offer credit
cards. This is an absolute necessity to keep the global economy afloat,
to maintain America’s financial leadership in the face of a growing
threat from Dubai and China.
Screw the Republican Senate to the wall. Screw McCain to the wall. Force him to make some hard choices, on TV, to twist the
arms of his own allies, to debate an issue on the floor overnight if
necessary. Remember, the Republican base is split on this. The
grassroots hate it, the Wall Street crowd knows it’s necessary. By
standing for the deal (and making the deal as good as we can get)
Democrats will win the loyalty of Wall Street. Which is essential if
you’re to build a governing coalition that lasts.
People forget this about the FDR New Deal coalition. There were bankers
in there. There were Wall Street bankers and regional bankers, men like Jesse Jones (right) who actually made a profit on the $10 billion FDR let him lend through the Resolution Trust Corp. during the Depression, before taking a bath on the $40 billion more that had to go out to beat Hitler. Or Joe
Kennedy, a stock swindler in the 1920s who then helped build the
rules that worked until a-holes like Phil Gramm decided to trash them.
It’s vital we make that clear. It’s vital we re-learn our history. This is a teachable moment.
My guess is that McCain will fold like a cheap suit. There are, as I
said, Republicans who are facing re-election and who know they can’t
win just on the right-roots. Senators like Norm Coleman and Gordon
Smith and John Sununu and Elizabeth Dole are anxious for a deal,
desperate for a deal, and they won’t stand on the principles the far
right wants them to stand on. My guess is a cloture vote would pass on
the present deal, even with John McCain voting "no."
It probably won’t come to that. I think the Wall Street pressure is
already building. I think Wall Street is ready to take the deal on the
table. I think Wall Street is going to make that crystal clear to Mr.
McCain by this time tomorrow.
If it comes to a real filibuster, we can put Sen. Biden in the chair
for a while and have Sen. Obama request a colloquy with McCain on why
he’s holding up the deal. That’s the debate that will be remembered.
After knocking the old man about for a while, the gentleman from
Illinois might offer to throw him a bone, a small one, a meaningless
one, a face-saving way out. And we all win.
Like I say, I don’t think it will come to that. I don’t think McCain
can get enough loyalty out of his caucus to defy Wall Street and the
markets.
But that’s how the chess match will play out, those are the
moves you have to anticipate as tonight’s moves are made.
